Good day, and welcome to the NCR Corporation Fourth Quarter Fiscal Year 2015 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Gavin Bell, Vice President of Investor Relations. Please go ahead, sir.

Good afternoon and thank you for joining our fourth quarter 2015 earnings call. Joining me on the call today and offering opening remarks are Bill Nuti, Chairman and Chief Executive Officer, and Bob Fishman, Chief Financial Officer. Additionally, available on the call today for Q&A are Andy Heyman, Senior Vice President and President, Financial Services; Michael Bayer, Senior Vice President and President, Retail Solutions; and Paul Langenbahn, Senior Vice President and President of Hospitality. Our presentations and discussions today include forecasts and statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. While these statements reflect our current outlook, expectations, and beliefs, they are subject to a number of risks and uncertainties that could cause actual results to vary materially. These risks and uncertainties are described in our earnings release and our periodic filings with the SEC, including our annual report to stockholders. On today's call, we will be referring to presentation materials posted on our website. We will also be discussing certain non-GAAP financial information such as free cash flow and results excluding the impact of pension and other items. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, and other information concerning such measures are included in the presentation materials and in our earnings release. These are also available on the Investor Relations section of NCR's website. A replay of the call will be available later today on our website, ncr.com. With that, I'd like to turn the call over to Bill Nuti. William R. Nuti - Chairman, President & Chief Executive Officer: Thanks, Gavin. Good afternoon, everyone, and thank you for joining us today. Before we get into Q4 and full year results, I wanted to provide a brief retrospective on 2015. First let me say…

Thank you. And our first question comes from Katy Huberty with Morgan Stanley. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Thank you. Good afternoon. Typically, over the past three years or four years, the first quarter EPS has made up about 15% to 19% of the full year earnings and guidance implies a much lower mix around 12% of EPS coming in the first quarter. Can you just walk through what some of the headwinds are in first quarter that then alleviate as you move through the year? And then I have a follow up. Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Yeah. Katy, this is Bob, and then others can chime in. But when I look at the operating income as a percentage of the full-year guidance, it's around 15%. The nine-year average has been 15.5%. The last couple of years have been a little bit higher than that, you're right 16%, 17%. So it is a little bit slower than what we saw the last couple of years. But overall, I would say, the backlog is good coming into the year. I mentioned a couple of times that we're seeing slower backlog rollout primarily in the financial industry. So while the first quarter is a little bit less, it's not a lot, and it's really reflective of that rollout. William R. Nuti - Chairman, President & Chief Executive Officer: Yeah. Katy, this is Bill. I would add that the primary reason really is some slower rollout of large branch projects that are coming mainly in Q2 and Q3. So it's a little bit slower, but I'm quite pleased with the ramp in the first half of the year in Q2 and then in the back half. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: And last quarter you talked about the delayed conversion of backlog relating to a higher mix of innovative products and higher mix of software. Do you think that, that still explains the delay or is some of the weakness we've seen in the stock market and the bank stocks in particular telling us that there was maybe some constraints around budgets? William R. Nuti - Chairman, President & Chief Executive Officer: I'll kick the call off with an answer and then Andy will give you his point of view as well on budget. But we're not seeing right now any budgetary constraints. And in fact, I would say, for branch in particular and backlog rollout, some of this is NCR induced and that we are working hard on finalizing some of our new solutions in the market, and that is also taking some time. So we're partly to blame on new projects rollout, but generally speaking, the ramp up of the backlog is really Q2 and beyond. Andy?

Yeah. Katy, I mean, you're looking at a situation, it's a really good story medium to long term, quarter-to-quarter it's got the challenges that you're mentioning, and you got a backlog position in Financial Services that ends 2015, up 14% constant currency. You've got a brand new product launch that is both in the ATM and the branch space that starts to come live in a big way in the second quarter. And then, we ramp from there. So like Bill said, not budgetary constraints at all, we just need to drive the launches of these solutions, and then we start releasing significant backlog conversion different than we were able to in 2015. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Okay. Thank you. That's helpful color.

And next will be Dan Perlin with RBC Capital Markets.

Thanks. My question is, can you just give us an update on now the Blackstone transaction is behind you guys, and I'm just wondering how those conversations are going in terms of what they are helping you with bringing to the table, incremental cost synergies that they envision, maybe that's not fully embedded yet, might be conservative guidance, I don't know. I'm just wondering if you could bring us forward a little bit on those discussions. Thanks. William R. Nuti - Chairman, President & Chief Executive Officer: Yeah. Dan, we're off to a good start with Blackstone. We are working with their internal operations team on a number of initiatives, mainly around improving our cost structure. And Bob will give you some examples in a moment of some short-term wins. But we're working with them very tightly, taking advantage of their $100 billion in procurement spend to reduce their overall direct cost. We're working with their teams on looking at areas like BPI through business process improvement, and also enterprise quality. But I'd say that, generally speaking, we're looking to recoup the annual cost of that relationship through the efforts that were now underway with them. Well, Bob anything other? Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Yeah. I'd agree. I'd say it's widespread across the company, their portfolio businesses have the $100 billion of purchasing power. So it's everything from lower prices that – at Hilton to taking advantage of some of their sourcing processes, their purchasing tools, as an example. And so really every function at NCR is getting with the Blackstone counterpart and looking at ways so they can optimize their spend. I'd also add that what we're seeing is the access to the talent pool that exists within Blackstone. So if we're looking for a business process improvement person or some other skill around any of our transformation areas, whether it'd be software services or sales transformation, there does seem to be a team of there that can help us with those initiatives. So I've been pleased around with the purchasing and cost, but also the talent management. William R. Nuti - Chairman, President & Chief Executive Officer: Yeah, final comment, Dan. Having Chinh Chu and Greg Blank on our board has also been a real value added for us. You mentioned guidance, and my only other comment there would be that, I think our guidance is appropriately conservative and prudent in light of the world around us today, but we feel very confident in the achievement of our current guidance.

In that same vein are some of these cost initiatives and access to talent pools to procurement. Are those all contemplated in these estimated numbers, or is that something that's going to play out over the course of 2016 and then we might see incremental benefits actually in the latter years? William R. Nuti - Chairman, President & Chief Executive Officer: I think that, that will play out, Dan, over the course of 2016. There could be benefit in 2016. Bob and I will cover more of that at the upcoming Analyst Day in March. But no doubt that we do not have contemplated in the current guidance any significant improvement that will come about as a result of our Blackstone initiatives.

Okay. And then one last, if I could ask, Andy. In the Financial Services segment, I kind of want to follow up a little bit on the original questions. There is this question about demand out there, and we heard a lot of it, I wonder if you look at the size of financial institutions, larger versus small and mid-tier. Can you just parse maybe the demand environment in the conversations you're having with those different sized financial institutions because they don't sound like their budgeting process or their demands are at all created equal at this point? Thanks.

Yeah. It's a fair question. When you look at the top level growth rates for 2015, it is a tale of two stories, Dan. I would not break it down by segment of customer, I would break it down more from a BRIC versus rest of world perspective. And when you look at an overall what was a fairly level business in 2015 versus 2014, really it was a BRIC shrink who caused us 500 basis points to 600 basis points of growth. So the rest of world grew 5% plus, but the BRIC shrink drag down the growth rates in a fairly significant way to where it looks like a pretty level business in 2015. So it's really a BRIC story. And when we look at 2016, we've really de-risked the BRIC business in terms of our outlook here. Last year was a tough year in the BRICs. NCR is not the only company that had that issue, and we're confident in our BRIC outlook in 2016.

Okay. Thank you, guys.

And our next question comes from Kartik Mehta with Northcoast Research.

Good evening. Bill, maybe you could, or Andy, you could just expand on the comments you just made a little while ago. I'm wondering as you look at 2016, at least for the Financial Self-Service business by geography, what kind of growth you're expecting? It sounds like, Andy, your expectations for 2016 growth in the BRIC countries is pretty low. But I wanted to get your perspective on just growth by geography in that business? William R. Nuti - Chairman, President & Chief Executive Officer: Hey, Kartik, it's Bill. I think we'll give you a little bit of color on in terms of growth in the sense of how mortgage (35:54) might move in the year. But Andy, could you give him a little more color than that on geographic growth?

Sure. Just in terms of the way we're looking at 2016 from a Financial Services perspective, where we're really looking at right now is a business that – you're looking at low single-digits on a global basis for Financial Services in terms of growth, and that's with about a 300 basis-point headwind from the BRICs. So we expect the BRICs will shrink again low double-digits offset by about 5% to 6% growth in the rest of the world. That really covers the Financial Services business.

And then, Bill, I think you mentioned that you're seeing some good growth or growth at least in the community FIs, and I'm assuming you meant the U.S. I'm wondering what's driving, is it hardware or software.

Bill, you want me to take that? William R. Nuti - Chairman, President & Chief Executive Officer: Go ahead, Andy, take it.

Yeah. So it's actually a great story. Let me start with how we closed Q4, which was order growth in the community financial institution segment of high 20%, almost 30% on order growth. So the key to the success is really not any one of the point solutions. It's really the omni-channel story taking off. So if you look at a customer that's looking for a stable partner, who can seamlessly integrate physical and digital channels and then take out costs in terms of leveraging their legacy systems, there is really only one choice for customers. So it's the omni-channel story that we're the only game in town for them. And then comes with that it's a hardware, software cloud bundle that is the name of the game for the community financial institution segment.

So Andy, are you saying it's both hardware and software, or is – because of the omni-channel it's a greater amount of software?

Well, I wouldn't say greater one way or the other, what I would say is that it's a software driven sale then we attach hardware on to. The old NCR was certainly hardware driven sale in today, and really for all of our industry teams today, it's a software driven sale, and especially through in the community financial institution segment where they don't have the time to best agree the decision process. They are looking for a fully integrated solution including cloud and digital banking tied in with the integration to self-service and branch transformation channel it will by the way has hardware that attaches with that to bring it to life.

And I guess, just one last question. I want to understand free cash flow, Bob. Your 2016 guidance, is there a difference between the guidance you gave from a GAAP standpoint versus non-GAAP in terms of the free cash flow you will generate? Robert P. Fishman - SVP, Chief Financial & Accounting Officer: You mean from the free cash flow guidance of $425 million to $475 million, Kartik, was your specific question?

Yeah. The $425 million to $475 million, if I compare that to GAAP in 2016, will it be the same or if there is a difference, what are the differences? Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Yeah. I mean, again the free cash flow number starts with a GAAP number of operating cash flow. And then you back out CapEx and discontinued ops. So no change from 2015, and it certainly – I think people view it as a non-GAAP term free cash flow, but it's very GAAP in terms of starting with operating cash flow and just backing out CapEx and disc ops.

Well, perfect, Bob. So it sounds like a real solid number for 2016 then. Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Yeah. I think from my perspective, if you look at kind of the history of free cash flow, we were in the 20% to 30% five years ago. We had a lot of legacy issues, pension contributions, environmental, and as we've worked our way through that and driven the software business, we have 85% conversion in 2015, 95% forecast in 2016, and we've made our numbers three years in a row. Last year I gave guidance of $325 million to $375 million, and we landed at $409 million. So that was a good answer. The whole company is energized around free cash flow, this year I've given guidance of $425 million to $475 million.

Perfect. Thank you. William R. Nuti - Chairman, President & Chief Executive Officer: Thanks Kartik.

And the next question will come from Matt Summerville with Alembic Global Advisors.

Hey, thanks. Just couple questions. First Bob, can you talk about what your goal would be in terms of a net debt to EBITDA ratio heading out of 2016? I know you exited 2015 at 2.8 times, and then I have a follow up, please. Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Yeah. I'll share a lot more of that as part of Analyst Day and capital allocation strategy. I will say this though, our goal remains to be solid double D. So that has not changed.

And then just as a follow up, Bill, you mentioned some things you guys are trying to do on the sales and service side of the company. Can you sort of talk about metrics that you are looking at that we can focus on, how much have your close rates improved across your sales organization, how much have your capture rates improved across your service organization, and I guess, how much more room to go is there before you would feel that you've hit your target? William R. Nuti - Chairman, President & Chief Executive Officer: Yeah. Many of the metrics we use to track sales effectiveness and transformation, you would not see, Matt. But the best proxy for that in my view is software growth. Ultimately, our sales organization today is transitioning from, I would say, a great product, hardware orientation to a software solutions orientation, and we are in the fifth inning of that game. And while we made good progress last year, we still have one year to two years left to complete that journey. And I would tell you today that, if you track our software growth, it's a really good proxy for sales force effectiveness because ultimately the transition believes (43:54) around solution selling and leading the software.

Thank you.

And our next question comes from Meghna Ladha with Susquehanna.

Hi. Good evening. Thanks for taking my question. In the Financial Services segment, you indicated that you're seeing positive trends in key businesses with orders up 30% in community bank, overall backlog up. I guess the question really is, is this related to just market share gains or market growth in general? William R. Nuti - Chairman, President & Chief Executive Officer: Andy, why don't you take that?

Sure. Yeah. When we look at the markets out there right now, and obviously the competitive landscapes are changing quite a bit, in the markets that we call addressable markets, in other words, where we've got sales coverage and we've got products fit, we're gaining share, no question. And then in terms of the overall market, there are certainly some areas that are growing faster than others. But generally speaking, where we have addressable market, meaning we're focused on, from a sales perspective, and we have products that will grow in share.

Got it. And then, Bob, in the past you've provided outlook for each segment. Can you give us some color for 2016? Robert P. Fishman - SVP, Chief Financial & Accounting Officer: We will provide a lot more color on the business as part of Analyst Day. Right now, it was important for us to establish guidance around total revenue, around EPS, earnings and free cash flow. We'll provide more detail as part of Analyst Day.

Okay. So then, would you be providing more details around the margins as well because I'm just trying to figure out as well, how should we think about margins in each of the segment, and which segment should we see the most margin expansion in 2016. Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Yeah, I think, as we put together – start putting together the Analyst Day deck, I think, you will find it quite insightful in terms of the analysis that we provide. So as we move into more of the omni-channel space, we'll be talking about the business consistent with that.

Got it. Thank you. William R. Nuti - Chairman, President & Chief Executive Officer: Thanks, Meghna.

And next will be Gil Luria with Wedbush Securities.

Yes. Thanks for taking my question. I had a couple of just financial clarifications. First of all, what's your underfunded status for the pension and obligations as of the end of the year? Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Let me get that answer to you as part of this call, but maybe go to your next question, Gil, and then I'll give you an update on that.

Sure, the $20 million reserve reversal, could you give us a little bit more detail into what that entails, what was the situation there? Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Yeah, I can. So this was in our Emerging Industries, it relates to an airport construction project in the Middle East. In this situation, the prime contractor got dismissed and we were a sub-contractor. We've been a very valued partner of the government and continue to be. This has been a long-term project for us. It was revenue that was booked years ago at relatively low margins in terms of it being an airport rollout, and this change of the prime contractor has caused a challenge in terms of ultimate payment. So we took a reserve, we continue to work that. It was necessary to book a reserve at the end of Q4, but we continue to work through payment options even though they might take some time.

Got it. So then the only other one I have is, branch transformation. The growth rate decelerated in the fourth quarter. How much total dollars did you do branch transformation last year, and what's your expectation for this year? William R. Nuti - Chairman, President & Chief Executive Officer: Yeah. I think total a year ago FX-neutral was somewhere in the $205 million range against our target of $230 million. We probably caused about $15 million to $20 million of the growth challenge in that project readiness was an issue for us in the back half of the year that we'll solve here in the first half of 2016. So demand was certainly there for our solution, but we missed the mark. And Andy, why don't you give additional color on that and some color on 2016?

Yeah. It's a business that we're looking at and you're talking about a 50% type of growth business. We think it will continue into 2016. The real drivers for us in 2016 continue to be the same things, but in broader geographies. So you got customers out there trying to change the game in terms of expanded store hours, expanded the distribution points, less labor to handle the service models that they are putting in place. The community financial institution market in the United States has been the main driver for us. The majors are a big driver for us in 2016, expanding more broadly in Middle East, Africa in 2016 as they need to change their economic models of how they run branches in the retail network. And then finally, Western Europe we see steam picking up greatly there as well. That's what the funnel tells us.

Got it. Thank you. Robert P. Fishman - SVP, Chief Financial & Accounting Officer: Hey Gil, on your pension question.

Yes. Robert P. Fishman - SVP, Chief Financial & Accounting Officer: So it's very consistent with what we had signaled back in Q2. You remember we transferred the overfunded London plan. So with that left was around $580 million of underfunded, think of that primarily as U.S. and Germany. Germany is a pay as you go plan. So that's very close to what you'll see in the 10-K.

Got it. Thank you very much.

Next will be Ian Zaffino with Oppenheimer. Richard Faulkner - Oppenheimer & Co., Inc. (Broker): Hey guys. This is actually Rick Faulkner for Ian. Just wondering if you've seen any change in the pricing environment in Financial given the consolidation between Wincor and Diebold? William R. Nuti - Chairman, President & Chief Executive Officer: Yeah, we have seen for the latter part of 2015, and concurrently 2016 consistent pressure on pricing because both of those companies are coming together and wanting to perform well prior to integration. But we do expect post integration for that hopefully to improve going forward. Andy, you may add some additional color.

Yeah. Rick, I mean, it's a marriage that's not yet happened, and we're in an engagement period now. And like any marriage, that spending, a lots of things get said now, and what ends up happening we don't know. What typically happens is you'll see stabilization occur in terms of two companies that become one, have to drive a tremendous amount of rationalization when it comes to product lines and costs. And so we're looking forward to that occurring, and we think once that happens that what our customers are telling us is, they're really looking for stable partners, they're really for clarity of roadmaps. How that make – when we're coming out with new products in that same period of time, our hope is that can be favorable to margins. And between now and then, it's a certainly highly competitive, as it always is, in these markets, in the ATM space, less competitive in the branch transformation and software space where we have a competitive edge and clear differentiation. Richard Faulkner - Oppenheimer & Co., Inc. (Broker): Okay. Yeah, I mean, I guess, I was expecting that maybe the pricing environment could become more favorable, but it sounds like you're saying, it's all too early to tell.

I would say that if things do become more favorable, typically in situations like this, what you'll see is that, that would happen after the marriage was consummated, which of course is not the case just yet. William R. Nuti - Chairman, President & Chief Executive Officer: Yeah. And Rick, through all of that, as you can see, we did improve operating margins, both in Q4 and on the full year in financials through all of the challenges we faced, plus a pricing environment that was a bit more aggressive than usual. Richard Faulkner - Oppenheimer & Co., Inc. (Broker): Okay. Great. Thanks. William R. Nuti - Chairman, President & Chief Executive Officer: Thanks.

And your next question comes from Matt Summerville with Alembic Global Advisors.

Hey, thanks. I just had a quick follow up. First on China, your two largest competitors have announced some sort of pursuing of a joint venture type strategy in order to be able to better participate in that market. We all know about the, by local requirement scene that's going on there. So if you could talk about how you're thinking about China, how you're positioned in or around that. And then secondarily, with Brazil, I believe towards the second half of this year your contract expires with Bradesco, sort of what the thought is there, what kind of happens going forward in your view? Thank you. William R. Nuti - Chairman, President & Chief Executive Officer: On China, Matt, we are looking at multiple options of how to successfully participate in that market having lived and worked there myself, I have a unique insight in how to do that. And I won't comment on our competition and what they've done, but we will address that this year, and the way we'll address it, I think, will be most beneficial to our shareholders and our long-term aspirations in China. On Brazil, Andy why don't you take that one?

Yes. I think the partnership we have in Brazil, as we look long-term we've now built a nine figure business in Brazil from a much smaller base five years ago. So as we look at the next five years, we're continuing to expand in Brazil with a more software driven approach. How we do that will depend on a few different variables. Going about it now alone, not to discuss, the whole thing can be removed from the current joint venture that we have. We're very confident and independent thriving Brazil business, notwithstanding the market challenges there given the economy. So that right now would be – I'd say, our most likely scenario as think medium-term to long-term in Brazil, but we've got of options and we'll explore all of them.

Thanks, guys.

Go ahead. William R. Nuti - Chairman, President & Chief Executive Officer: Thank you all for joining and see you on March 7, and I look forward to see you there. Good night.